- Libra, although still in development Libra is stirring discussions in the United States.
- Bitcoin pushed against key support levels following the drop from $13,000.
- A double-bottom pattern could lead to a breakout likely to bring Bitcoin back above $13,000.
Bitcoin has been bombarded on several occasions lately due to the regulatory challenges hitting Facebook’s proposed cryptocurrency Libra. Although still in development Libra is stirring discussions in the United States, Europe and even China. Moreover, Congress has set hearings for Facebook this week. In addition to that, Trump’s negative stand against Bitcoin and other cryptocurrencies are doing little to improve the situation.
Meanwhile, Bitcoin pushed against key support levels following the drop from $13,000. BTC/USD fell under $10,000 forming a weekly low around $9,900. Although the drop under $10,000 was only momentarily, the reversal is capped under $10,400 at press time.
BTC/USD 2-h chart
Bitcoin is trading at $10,290 and the trend has a bearish biased with the path of least resistance being to the downside. A look at the technical picture shows that the bears are gaining traction and have the upper hand. The Moving Average Convergence Divergence (MACD) in the 2-h timeframe is stuck in the negative area. However, if the developing divergence progresses, Bitcoin could begin to correct towards $10,400.
The Relative Strength Index (RSI) has recovered from the oversold levels reached yesterday and during the Asian hours today. However, the upward hit a snag under 40 the current signal downwards means that a reversal could test $10,200 support.
On a positive note, a formed double-bottom pattern could lead to a breakout likely to bring Bitcoin back above $13,000. However, this depends on the ability of Bitcoin to find a catalyst. In this case, many experts believe a breakthrough for Libra in the Congress hearings could propel Bitcoin to higher levels and correction the movement in the last few days. Omkar Godbole, CoinDesk analyst says:
“Facebook’s fiat and government bond backed cryptocurrency Libra is widely considered a net positive for bitcoin, an anti-establishment asset.
This is evident from the fact that BTC rallied from $9,000 to $13,800 in the eight days following Facebook’s unveiling of Libra’s white paper on June 18.
So, it is hardly surprising that the leading cryptocurrency is feeling the pull of gravity ahead of the congressional hearings on Libra and will likely take a hit if the U.S. lawmakers throw a spanner in the works for Facebook.”
Bitcoin Key Technical Levels
Key Support Areas: $10,200, $10,000, $9,900 and $9,670 (July lows).
Key Hurdles: $10,400, $10,500, $11,000 and $12,000.
MACD 2-h: Stuck in the negative – negative signal in the near-term.
RSI 2-h chart: Recovery stalls under 40; downward slope hints breakdown.